LIC – Jeevan Surabhi

Jeevan Surabhi plan is similar to other money back plans.However main differences in regular money back plans and Jeevan Surabhi are as under

Maturity term is more than premium paying term.

Early and higher rate of survival benefit payment.

Risk cover increases every five years.

The actual term and the premium paying term for these plans are as under.

Plan no.

Policy Term

Premium Paying Term

106

15 years

12 years

107

20 years

15 years

108

25 years

18 years

Full sum assured is paid back as survival benefit by the end of premium paying term. However, the risk cover and additional risk cover continue and the policy participates in profits till the end of policy term.

Accident Benefit is restricted to the premium paying period and to the overall limit of Rs.5 lakhs on a single life.

Suitable For:
This plan holds special interest to people who besides wishing to provide for their old age and family feel the need for lump sum benefits at periodical intervals.

Introduction
Insurance Regulatory & Development Authority (IRDA) requires all life insurance companies operating in India to provide official illustrations to their customers. The illustrations are based on the investment rates of return set by the Life Insurance Council (constituted under Section 64C(a) of the Insurance Act 1938) and is not intended to reflect the actual investment returns achieved or may be achieved in future by Life Insurance Corporation of India (LICI).

For the year 2004-05 the two rates of investment return declared by the Life Insurance Council are 6% and 10% per annum.

Product summary
This is a with-profits plan available for three different terms of 15, 20 and 25 years with corresponding premium paying terms of 12, 15 and 18 years. The plan provides a specified percentage of Sum Assured on survival up to specified durations. A life insurance cover is available throughout the term of the plan which increases after every five yearly intervals.

Premiums :
Premiums are payable yearly, half-yearly, quarterly, monthly or through salary deductions as opted by you throughout the premium paying term of the policy or till the earlier death.

Bonuses :
This is a with-profit plan and participate in the profits of the Corporation’s life insurance business. It gets a share of the profits in the form of bonuses. Simple Reversionary Bonuses are declared per thousand Sum Assured annually at the end of each financial year. Once declared, they form part of the guaranteed benefits of the plan. A Final (Additional) Bonus may also be payable provided policy has run for certain minimum period.

Death Benefit:
The Sum Assured alongwith the additional cover, if any, plus all bonuses declared till death is payable in a lump sum upon the death of the life assured during the policy term. The survival benefits paid prior to death will not be deducted from the claim amount.

If death occurs at anytime during the term of a policy (provided the policy has been kept in force by payment of all premiums that had fallen due), the basic sum assured along with the vested bonus will be paid. The survival benefits already paid, if any, will not be deducted from this claim amount. An additional amount (depending on the duration of the policy) will also be paid on death under such a policy. The additional amounts payable, at various stages are shown in the table given below.

Policy

1st year Policy

policy year
6th-10th

11th-15th policy year

16th-20th policy year

21st-26th policy year

106

NIL

500

1000

NIL

NIL

107

NIL

500

1000

1500

NIL

108

NIL

500

1000

1500

2000

Survival Benefits:

A percentage of sum assured as mentioned below will be paid on your survival to the end of specified durations:

Percentage of Sum Assured payable at the end of specified duration

Plan and Term ( Premium Paying Term )

Duration

Plan

106/15(12)

107/20(15)

108/25(18)

4

30%

25%

20%

5

–

–

8

30%

25%

20%

10

–

–

–

12

40%

25%

20%

15

–

25%

20%

18

–

20%

Plan no

Survival Benefits

% of basic Sum Assured.

Risk Cover upto

106

at the end of 4 years

30

15 years

at the end of 8 years

30

at the end of 12 years

40

at the end of 15 years

Bonus

107

at the end of 4 years

25

20 years

at the end of 8 years

25

at the end of 12 years

25

at the end of 15 years

25

at the end of 20 years

Bonus

108

at the end of 4 years

20

25 years

at the end of 8 years

20

at the end of 12 years

20

at the end of 15 years

20

at the end of 18years

20

at the end of 25years

Bonus

Maturity Benefit :

The policy matures on your survival to the end of the policy term. All bonuses declared up to maturity date will be paid in a lump sum.

Supplementary/Extra Benefits :

These are the optional benefits that can be added to your basic plan for extra protection/option. An additional premium is required to be paid for these benefits.

Surrender Value :

Buying a life insurance contract is a long-term commitment. However, surrender values are available under the plan on earlier termination of the contract.

Guaranteed Surrender Value :

The policy may be surrendered after it has been in force for 3 years or more. The guaranteed surrender value is 30% of the basic premiums paid excluding the first year’s premium in case no survival benefit payment has already fallen due. Where one or more survival benefits have fallen due, the guaranteed surrender value will be 30% of the premiums paid on or after the due date of payment of latest survival benefit.

Corporation’s policy on surrenders :

In practice, the Corporation will pay a Special Surrender Value – which is either equal to or more than the Guaranteed Surrender Value. The benefit payable on surrender is the discounted value of the reduced claim amount that would be payable on death or at maturity. This value will depend on the number of premiums paid and the duration at which surrender value is calculated. In some circumstances, in case of early termination of the policy, the surrender value payable may be less than the total premium paid.

The Corporation reviews the surrender value under its plans from time to time depending on the economic environment, experience and other factors.

Note:

The above is the product summary giving the key features of the plan. This is for illustrative purpose only. This does not represent a contract and for details please refer to your policy document.

Benefit Illustration :

Statutory warning :

“Some benefits are guaranteed and some benefits are variable with returns based on the future performance of your insurer carrying on life insurance business. If your policy offers guaranteed returns then these will be clearly marked “guaranteed” in the illustration table on this page. If your policy offers variable returns then the illustrations on this page will show two different rates of assumed future investment returns. These assumed rates of return are not guaranteed and they are not the upper or lower limits of what you might get back as the value of your policy is dependent on a number of factors including future investment performance.”

Illustration 1:

Age at entry : 35 years

Policy Term : 15 Years

Premium Paying Term : 12 Years

Mode of premium payment : Yearly

Sum Assured : Rs. 1,00,000 /-

Annual Premium : Rs. 10963 /-

End of year

Total premiums paid till end of year

Benefit on death during the year

Guaranteed

Variable

Total

Scenario 1

Scenario 2

Scenario 1

Scenario 2

1

10963

100000

2400

4800

102400

104800

2

21926

100000

4800

9600

104800

109600

3

32889

100000

7200

14400

107200

114400

4

43852

100000

9600

19200

109600

119200

5

54815

100000

12000

24000

112000

124000

6

65778

150000

14400

28800

114400

178800

7

76741

150000

16800

33600

116800

183600

8

87704

150000

19200

38400

169200

188400

9

98667

150000

21600

43200

171600

193200

10

109630

150000

24000

48000

174000

198000

12

131556

200000

28800

57600

228800

257600

15

131556

200000

36000

72000

236000

272000

End of year

Total premiums paid till end of year

Benefit on survival / maturity

Guaranteed

Variable

Total

Scenario 1

Scenario 2

Scenario 1

Scenario 2

1

10963

0

0

0

0

0

2

21926

0

0

0

0

0

3

32889

0

0

0

0

0

4

43852

30000

0

0

30000

0

5

54815

0

0

0

0

20000

6

65778

0

0

0

0

0

7

76741

0

0

0

0

0

8

87704

30000

0

0

30000

0

9

98667

0

0

0

0

0

10

109630

0

0

0

0

20000

12

131556

40000

0

0

40000

20000

15

131556

0

36000

72000

36000

72000

Illustration 2:

Age at entry : 35 years

Policy Term : 25 Years

Mode of premium payment : Yearly

Sum Assured : Rs. 1,00,000 /-

Annual Premium : Rs. 5507 /-

End of year

Total premiums paid till end of year

Benefit on Death during the year (Rs.)

Guaranteed

Variable

Total

Scenario 1

Scenario 2

Scenario 1

Scenario 2

1

9581

100000

2100

4600

102100

104600

2

19162

100000

4200

9200

104200

109200

3

28743

100000

6300

13800

106300

113800

4

38324

100000

8400

18400

108400

118400

5

47905

100000

10500

23000

110500

123000

6

57486

150000

12600

27600

162600

177600

7

67067

150000

14700

32200

164700

182200

8

76648

150000

16800

36800

166800

186800

9

86229

150000

18900

41400

168900

191400

10

95810

150000

21000

46000

171000

196000

12

114972

200000

25200

55200

225200

255200

15

143715

200000

31500

69000

231500

269000

20

143715

250000

42000

92000

292000

342000

End of year

Total premiums paid till end of year

Benefit on survival / maturity at the end of year

Guaranteed

Variable

Total

Scenario 1

Scenario 2

Scenario 1

Scenario 2

1

9581

0

0

0

0

0

2

19162

0

0

0

0

0

3

28743

0

0

0

0

0

4

38324

25000

0

0

25000

25000

5

47905

0

0

0

0

0

6

57486

0

0

0

0

0

7

67067

0

0

0

0

0

8

76648

25000

0

0

25000

25000

9

86229

0

0

0

0

0

10

95810

0

0

0

15000

15000

15

114972

25000

0

0

25000

25000

20

143715

25000

0

0

25000

25000

25

143715

0

56000

122000

56000

122000

Illustration 2:

Age at entry : 35 years

Policy Term : 25 Years

Mode of premium payment : Yearly

Sum Assured : Rs. 1,00,000 /-

Annual Premium : Rs. 5507 /-

End of year

Total premiums paid till end of year

Benefit on Death during the year (Rs.)

Guaranteed

Variable

Total

Scenario 1

Scenario 2

Scenario 1

Scenario 2

1

8776

100000

2800

6500

102800

106500

2

17552

100000

5600

13000

105600

113000

3

26328

100000

8400

19500

108400

119500

4

35104

100000

11200

26000

111200

126000

5

43880

100000

14000

32500

114000

132500

6

52656

150000

16800

39000

166800

189000

7

61432

150000

19600

45500

169600

195500

8

70208

150000

22400

52000

172400

202000

9

78984

150000

25200

58500

175200

208500

10

87760

150000

28000

65000

178000

215000

12

105312

200000

33600

78000

233600

278000

15

131640

200000

42000

97500

242000

297500

18

157968

250000

50400

117000

300400

367000

20

157968

250000

56000

130000

306000

380000

25

157968

300000

70000

162500

370000

462500

End of year

Total premiums paid till end of year

Benefit on survival / maturity at the end of year

Guaranteed

Variable

Total

Scenario 1

Scenario 2

Scenario 1

Scenario 2

1

9581

0

0

0

0

0

2

19162

0

0

0

0

0

3

28743

0

0

0

0

0

4

38324

20000

0

0

20000

20000

5

47905

0

0

0

0

0

6

57486

0

0

0

0

0

7

67067

0

0

0

0

0

8

76648

20000

0

0

20000

20000

9

86229

0

0

0

0

0

10

95810

0

0

0

20000

20000

15

114972

20000

0

0

20000

20000

20

143715

20000

0

0

20000

20000

25

143715

0

93000

220500

93000

220500

i) This illustration is applicable to a non-smoker male/female standard (from medical, life style and occupation point of view) life.

ii) The non-guaranteed benefits (1) and (2) in above illustration are calculated so that they are consistent with the Projected Investment Rate of Return assumption of 6% p.a.(Scenario 1) and 10% p.a. (Scenario 2) respectively. In other words, in preparing this benefit illustration, it is assumed that the Projected Investment Rate of Return that LICI will be able to earn throughout the term of the policy will be 6% p.a. or 10% p.a., as the case may be. The Projected Investment Rate of Return is not guaranteed.

iii) The main objective of the illustration is that the client is able to appreciate the features of the product and the flow of benefits in different circumstances with some level of quantification.

iv) Future bonus will depend on future profits and as such is not guaranteed. However, once bonus is declared in any year and added to the policy, the bonus so added is guaranteed.